By Will Horner and Amber Burton
U.S. stocks wobbled Wednesday, swinging between small gains and
losses for most of the session, as investors monitored the
impeachment proceedings against President Trump in Washington.
House lawmakers voted shortly after the stock market closed to
impeach the president for inciting last week's Capitol riot, just
days before he is due to leave office. While the political rancor
has weighed on market sentiment in recent days, most money managers
are looking past the developments in Washington to focus on the
prospects for additional fiscal stimulus.
"The market is largely focusing on the fundamentals around a
Biden administration," said Willem Sels, global chief investment
officer at HSBC Private Banking.
The S&P 500 ticked up 8.65 points, or 0.2%, to 3809.84. The
Dow Jones Industrial dropped 8.22 points, or less than 0.1%, to
31060.47. The Nasdaq Composite rose 56.52 points, or 0.4%, to
Stocks have struggled for direction this week after notching
records in early January as investors weighed the prospect of fresh
government spending against political turmoil in Washington and
still rising Covid-19 cases. Energy and banking stocks are among
the best performers so far in the new year as investors bet on
companies that fared poorly in 2020 and are likely to benefit as
the economy recovers.
"Markets are going to remain choppy for a while, but through it
all, we remain cautiously optimistic," said Altaf Kassam, head of
investment strategy for State Street Global Advisors in Europe.
"The amount of fiscal stimulus that is possible will protect risky
assets, and there is still a lot of cash on the sidelines."
In addition to looking at the prospects for additional stimulus,
some money managers are keeping an eye on the incoming
administration's rollout of the vaccine.
"The number one thing that we're watching is a speed up in the
vaccination distribution," said Megan Horneman, director of
portfolio strategy at Verdence Capital Advisors. "That's extremely
important to get us back and get us to be able to reopen."
U.S. inflation data out Wednesday showed that consumer prices
increased only moderately last month, reflecting weak demand for a
range of goods and services. Some economists expect inflation to
pick up the pace as the economy grows faster later this year.
"The inflation picture is going to look different six months
from now," said Andrew Mies, chief investment officer at 6
Meridian. "You're likely going to see higher levels of
The Federal Reserve's beige book report also came out Wednesday
offering the latest collection of business anecdotes across Fed
districts with insights into how companies view the economy's
prospects. The report indicated declines in retail sales and demand
for hospitality and leisure services in some parts of the
"We know the economy is going to be bigger at some point, so the
market is willing to look forward," Mr. Sels said. "We are still in
a risk-on environment."
In corporate news, shares of Intel climbed $3.71, or 7%, to
$56.95, as the chip giant said it ousted Chief Executive Bob Swan
after activist hedge fund Third Point urged sweeping changes at the
General Motors shares rose 91 cents, or 1.9%, to $48.73 after
the auto maker said it was launching a new electric-truck
A selloff in U.S. government bonds eased late Tuesday following
strong demand for an auction of new 10-year notes. On Wednesday,
the yield on the 10-year Treasury note edged down to 1.089%, from
1.136% Tuesday. Bond yields fall as the price rises.
Bond yields, which had advanced for seven consecutive days, are
unlikely to climb much further, Mr. Kassam said.
"Rates are capped where they are now, and the Fed has
effectively got a form of yield curve control in place because they
have a commitment to buy bonds," he said. "I don't think we will
see rates move much higher, because there is still a lot of
Overseas, the Stoxx Europe 600 added 0.1%. Among major European
equities, French retailer Carrefour jumped 13% after saying it was
in talks with Canada's Alimentation Couche Tard over a potential
In Asia, major indexes ended the day mixed. Japan's Nikkei 225
rose 1%, and South Korea's Kospi gained 0.7%. The Shanghai
Composite fell 0.3%.
Write to Will Horner at William.Horner@wsj.com and Amber Burton
(END) Dow Jones Newswires
January 13, 2021 17:02 ET (22:02 GMT)
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